Financial Readiness Training - Cost Based Reimbursement Methodology - - PowerPoint PPT Presentation

Financial Readiness Training - Cost Based Reimbursement Methodology for School-Based Health Services May 2011

May 2011 Page 2

Agenda

• Overview of Cost Settlement Methodology
• Key Changes
• The Chart of Accounts and Federal Funds
• Transportation Service Costs
• Importance of Inter-Department Coordination
• Timeline for School Year 2011-2012 Services
• Next Steps

May 2011 Page 3

Overview of Cost Settlement Methodology

• Federal Medicaid (CMS) requires that States demonstrate that rates

paid for school-based services are no higher than the actual cost of providing medical services.

• In order to comply with this requirement, AHCCCS will implement a

Medicaid cost reconciliation and settlement process effective for SFY 2012.

• So what does that mean for LEAs?
• LEAs will go through an annual cost settlement process which will require

the submission of a Medicaid cost report.

• Actual costs of providing Medicaid-covered health related services will

be compared to Medicaid reimbursement received.

• If costs exceed reimbursement received, LEA will receive a settlement.
• If costs are less than reimbursement received, LEA will payback the

difference.

May 2011 Page 4

Overview of Cost Settlement Methodology

Federal funds are not eligible costs for cost settlement purposes and LEAs will be required to correctly identify these costs to ensure they are properly excluded from the cost reimbursement process.

May 2011 Page 5

Overview of Cost Settlement Methodology

• LEAs continue the DSC billing process and receive interim payments on

approved claims.

• Interim claiming will remain a critical component in the DSC

reimbursement process.

• Integrated single time study for MAC claiming and DSC reimbursement.
• All LEAs that participate in the DSC program will be required to have direct

medical service staff participate in the time study process.

• If direct medical staff are mistakenly omitted from the time study, the

costs incurred for these staff will not be recognized in the cost settlement process.

May 2011 Page 6

Key Changes

• AHCCCS will restrict cost settlement process to settle only service

categories where LEAs billed and received payment.

• LEAs must continue to bill for direct services throughout the year.
• Claiming activity will be monitored throughout the year and compared to

thresholds established based on prior year’s activity.

• LEAs have the ability to take a conservative approach to billing while still

maintaining the same level of claiming.

• One way to minimize the risk of interim payments exceeding annual costs

is to reduce billed rates of submitted claims

• LEAs can submit claims using a lower billed amount than the rates in the

Fee Schedule (e.g. $23.44 rather than $46.88 for an individual speech service)

• The Fee Schedule represents the maximum AHCCCS will pay for each service
• If using a billing vendor, the LEA must coordinate and communicate desired rate(s)

May 2011 Page 7

The Chart of Accounts and Federal Funds

• Only those costs identified within the approved chart of accounts are

eligible for cost settlement.

• PCG will be providing additional training on this issue but the reporting

requirements are based upon the ADE defined expenditure reporting requirements.

• Staff who are 100% federally funded should not be included in RMTS

and should not bill for services.

• Costs for staff who are inadvertently included on the RMTS staff pool list

will be unallowable.

• Only non-federal funds can be included in the calculation of Medicaid cost,

costs paid with federal funds will be excluded from the cost settlement process.

May 2011 Page 8

The Chart of Accounts and Federal Funds

• It is critical that LEAs examine their current funding levels and evaluate

funding sources used to pay for direct medical services.

• Costs incurred from federal funding sources will be removed from the cost

settlement process.

• If direct medical service providers are paid with federal funding sources

(AZDE Chart of Accounts fund codes 100-399, except fund code 290) LEAs need to determine if state and local funds can be leveraged alternatively to pay for these staff.

• LEAs should examine each direct medical service provider and understand

the current funding sources used to pay for these employees/contractors.

• If alternative state and local funding sources cannot be leveraged for staff

that are currently fully federally funded the LEA should potentially stop interim claiming for services provided by these staff.

May 2011 Page 9

Transportation Service Costs

• Transportation service costs will be collected annually during the

completion of the Medicaid cost report.

• Eligible costs include:
• Salary and benefits for bus drivers and mechanics;
• Depreciation costs of buses;
• Fuel and oil costs;
• Maintenance and repair costs;
• Insurance costs; and
• Contract costs.
• LEAs will need to determine whether costs can be discretely identified

as specialized transportation costs versus general transportation costs.

May 2011 Page 10

Importance of Inter-Department Coordination

• LEAs must actively work collaboratively with the finance/business office,

human resources, and transportation departments to properly administer this program AND help prevent a payback settlement situation. Issue: Finance and special education do not identify federally funded direct service claiming staff prior to the RMTS staff roster update. Actions: 1. Federally funded staff continue to claim Medicaid for services and thus LEA is receiving interim payments on services.

• 2. Federally funded staff are included in the RMTS however, their

costs cannot be included for the quarterly MAC claim OR annual cost settlement. Result: LEA has received interim payments all fiscal year for services provided by a federally funded staff which may result in a negative settlement; the LEA must pay back Medicaid for overpayment.

May 2011 Page 11

Timeline for School Year 2011-2012 Services

Se p 2012 Oc t 2012 Nov 2012 De c 2012 Ja n 2013 F e b 2013 Ma r 2013 Apr 2013 Ma y 2013 Jun 2013 July 2013 Aug 2013

6/30/12 School year ends and RMTS is complete 10/1/12 Opening of annual Medicaid Cost Reporting to LEAs 12/1/12 Cost report finalized and submitted by LEAs PCG reviews cost reports and conducts follow up and desk reviews with LEAs (thru 6/30/13) 7/31/13 Calculate and revise LEA interim payment rates 7/31/13 Completion of processing FY12 claims 8/31/13 Completion of Medicaid cost settlement

May 2011 Page 12

Next Steps

• Ensure all direct medical staff are included within the RMTS staff pool

list in order to maximize the reporting of allowable Medicaid costs.

• Examine current use of federal funding for direct medical staff and

determine if additional state and local funds can be leveraged to pay for direct medical services.

• Examine transportation service costs.
• Begin to determine whether specialized transportation costs can be

discretely identified or whether costs will need to be reported as general transportation services costs.

• Start paving the way for success and begin inter-departmental

discussions regarding coordination for the school-based Medicaid program.